Commonwealth Bank executive Grahame Petersen retires

Adele Ferguson, Ben Butler

The Commonwealth Bank financial planning scandal appears to have claimed its first executive scalp after the business and private banking boss, Grahame Petersen, retired on Friday morning.

No replacement has been announced for Mr Petersen, who ran the bank's financial advice business between 2006 and 2011, when bad behaviour by planners, including "Dodgy'' Don Nguyen, was at its height.

He was replaced by Annabel Spring, who remains in the role and is unaffected by Friday's executive reshuffle.

In June, a scathing Senate inquiry report found allegations of fraud, forgery and a management cover-up within the CBA's financial planning division and called for a royal commission into the scandal.

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The bank was forced to widen its compensation scheme for clients who lost money because of dodgy financial advice and in July appointed former High Court judge Ian Callinan to chair a review panel.

As late as early July, Mr Petersen was being promoted by the bank as among its crop of up-and-coming executive talent, featuring in a lengthy profile of the CBA's "new breed of tech-savvy execs'' in the Financial Review's Boss magazine.

"Whoever is the leader of the particular structure is describing what needs to be achieved: the big-picture why,'' he told Boss. "But the how is now a matter of delegation. We describe what is to be achieved, but empower our people in terms of how it should be done.''

In its June report, the Senate inquiry expressed "grave concern'' that compliance controls within the CBA's biggest advice arm, Commonwealth Financial Planning (CFPL), were still weak.

"The committee understands that as early as 2006, as a result of its surveillance, ASIC [Australian Securities and Investments Commission] alerted the general manager of the CFPL to key concerns about CFPL's compliance framework,'' the inquiry found.

"One such concern was that representatives rated as critical (the highest risk category) as a result of serious misconduct were not 'effectively addressed within the current framework'.''

It said the scandal "needs to become a lesson for the entire financial services sector''.

"Firms need to know that they cannot turn a blind eye to rogue employees who do whatever it takes to make profits at the expense of vulnerable investors,'' it said.

The CBA chief executive, Ian Narev, said Mr Petersen "is widely admired and will be missed''.

"For some time now he has been discussing with me his intention to retire and broaden his interests," Mr Narev said.

"Grahame has made a significant contribution to the group, always demonstrating the benefit of his experience, strategic thinking and people focus.''

The CBA said it hoped to announce a replacement for Mr Petersen by the time he departed at the end of the year. When contacted by Fairfax Media for comment regarding the reasons for Mr Petersen's departure, the bank declined to elaborate.

In other executive moves, the head of international financial services, Simon Blair, has stepped down, but will remain with the CBA by representing it on subsidiary boards in China, New Zealand and Britain.

He has been replaced by the strategic development head, Rob Jesudason, who will retain his existing responsibilities.